Income Tax Return | All you need to know about filing I-T returns for AY 2022-23

The last date for filing income-tax returns, July 31, is nearly here. You simply cannot afford to miss this deadline to file income tax returns (ITR) for the financial year 2021-22 (assessment year 2022-23) without late-filing fees.

Moneycontrol has been running a special series on ITR filing to assist taxpayers to complete the exercise on time, with minimum hassles. If you missed reading our ITR filing guide, here’s a quick summary of the most frequently asked questions and their answers.

Do I need to file income tax returns?

In certain cases, it is mandatory. For example, if your income exceeds the basic tax exemption limit, which is Rs 2.5 lakh for those under 60 years of age. For those between 60 and 80 years of age, this threshold is Rs 3 lakh. For very senior citizens (above 80 years of age), the basic exemption limit is Rs 5 lakh.

Irrespective of your taxable income, however, you also have to file returns if your foreign travel expenses in a financial year have exceeded Rs 2 lakh or your electricity bill amount has crossed Rs 1 lakh. Similar is the case if you have foreign income and assets. Those depositing over Rs 50 lakh in savings bank accounts and Rs 1 crore or more in current accounts, too, need to file returns.

Not filing returns or missing the July 31 due date could result in late-filing fee or penal interest.

While it is mandatory to file ITR in such cases, you could benefit by completing the process even if these conditions are not applicable to you. For instance, the only way to reclaim refund of excess taxes paid as TDS (tax deducted at source) is by filing ITR on time. So, you must file your returns if you have missed submitting proofs to your employer for claiming deductions under sections 80C, 80D and so on in January or February.

Why is it important to select the right ITR form?

Simply because filing a wrong ITR form will result in your returns being rendered invalid. So how do you select the right form? Out of the seven ITR forms notified by the Central Board of Direct Taxes (CBDT), ITR-1 to ITR-4 are the ones applicable to individual taxpayers.

For salaried individuals, ITR-1 and ITR-2 are the most relevant ones. For instance, if you are a salaried individual and your total income for FY2021-22 was up to Rs 50 lakh, you can select ITR-1.

You can also file a return in ITR-1 if you earn income from other sources like interest from bank deposits and one house property. Also, if you have agricultural income of up to Rs 5,000, you can use ITR-1.

Also read: How to select the right ITR form

I had forgotten to submit investment proofs to my employer in January. Can I claim these deductions while filing returns?

Yes. The deadline set by employers for submitting investment declarations to claim deductions under sections 80C, 80D, 80E and so on is January or February and even March in some cases. However, many employees fail to meet the deadline for submitting tax-saving investment proofs. As a result, a higher amount of tax is deducted from the salary during the last three months of the financial year. If you missed submitting the proofs, you can enter the details in your tax return form and claim such deductions and tax refund for the excess tax deducted.

What are the most common errors made while filing ITR?

Minor errors made when filing ITR can result in your return being considered invalid. These errors could be as simple as not choosing the right assessment year. Remember, you will be filing ITR for the financial year 2021-22 and, thus, assessment year 2022-23.

Check your bank account details in the ITR form thoroughly. Entering this information incorrectly could lead to a delay in getting your tax refund. Also, like many Indian employees, if you switched jobs during 2021-22, do not forget to declare the salary paid by your previous employer.

What if I forget to disclose some income that I had earned? Will the income tax department send me a notice?

Some taxpayers forget to disclose certain incomes, even if unintentionally. This is the case particularly with salaried individuals who rely solely on their Form-16, which does not contain details of capital gains, or fixed or savings deposit interest incomes, for instance. While the detailed Annual Information Statement (AIS) that collates your financial transactions could prevent such mistakes, you need to be careful. If the income tax department detects this missing income, you could end up getting a notice.

Do I need to complete the verification process after filing tax returns?

Yes, this step is mandatory—return-filing won’t be considered complete until you verify the returns. You have to complete this process within 120 days of having filed your ITR. But many forget to do so even though the electronic process can be completed in a matter of minutes.

It is best to opt for e-verification. You can use Aadhaar-OTP, your internet banking account, or your pre-validated bank or demat account to generate an electronic verification code (EVC) to complete the process immediately after submitting your returns.

You can, of course, take the physical route too, but the process is time-consuming. You will have to download the ITR-V, or acknowledgement form, and send it physically to the income tax department’s CPC office in Bengaluru.